Lindsey Report – December

If we just looked at the change in valuations during November, one might have thought that it was a fairly benign time period: clearly that was not the case. Looking at equities, the S&P 500 moved one point from 2079 to 2080.  On the fixed income front, the Barclays US Aggregate Bond dipped down ever so slightly (Morningstar).

As you well know, the most notable events taking place in November and now early December are not related to economics. The tragedies are awful and unfathomable, but they happened.  Clearly all our concerns are for the victims and their families.  Additionally, I am hoping that the civilized world will address this issue with serious vigor.

As this letter is intended to be investment and economics based, that will be the focus. The equity and fixed income markets seemed to be largely focused on economics.  The U.S. economy, while continuing to trudge along, added 211,000 jobs in November, which was a solid number (AP).

On the other hand, the Institute for Supply Management (ISM) released their report on manufacturing, stating “Economic activity in the manufacturing sector contracted in November for the first time in 36 months, since November 2012, while the overall economy grew for the 78th consecutive month”.  Highlighting these two reports suggests a continued mixed bag and a domestic economy that remains in a “low-growth” environment.

The most significant, planned event on the horizon is the Federal Reserve meeting scheduled for next week (15th/16th).  It is widely expected that they will begin raising rates.  They have telegraphed this move, so it would likely be more surprising and disruptive if they choose to leave rates alone.   Assuming they do raise rates, it will be interesting to see the response in the markets.  Even though it has been forecasted, it is not real until they start and a knee-jerk-reaction won’t surprise me in the least.

 

The opinions voiced are for informational purposes only and are not intended to provide specific advice to any individual. To determine which investments are appropriate for you, consult myself prior to investing. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.  The economic forecasts set forth in this commentary may not develop as predicted and there can be no guarantees that strategies promoted will be successful.

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